Situation 2

The investor. You bought some first-class bonds and then found out that the financial position of the company, which issued these bonds, became worse. This fact may lead to the decrease of bond’s market value in future. You have a meeting with your broker and give him the task to sell these bonds.

The broker. You don’t share the fear and apprehensions of your client. The situation in the stock market shows that the rate of these bonds is growing. Moreover, the company, which issued them, services a large state contract. You try to prevent your client from making a mistake and convince him not to sell the bonds.

Brainstorming activity

Problem 1

The investor learnt from the newspapers about bankruptcy of company A which used to be profitable. It means that to redeem its bonds now is hardly probable. Yesterday he was offered the bonds of this company at a suspiciously low price. Today he’s got the information that the company has an opportunity to repay all its debts and become payable. The risk is large but possible profit is large too. What should he do?

Problem 2

The company, which issued bonds, is becoming less competitive. It desperately needs some urgent investments in order to keep its market share. However, the company has to repay a great amount of intermediate dividends on bonds during this month. This is the money that could be spent as its own investments. What should the top management do?

Final discussion

Preparing for final discussion, try to search for extra information in special editions, magazines and financial text-books. Consult your teachers of special subjects and use the Internet resources. It is recommended to subdivide the group into 3 subgroups for better organization of the discussion.

Questions for discussion:

1. How can you account for the numerous tables the newspaper financial pages carry? Do they display a tendency to multiply?

2. Do you think that absence of a developed system of indexes poses problems for the securities market in this country?

3. What do you know about stock index options and futures? In what way do they influence on the financial speculations?

Unit 2. Foreign Exchange Part 1. Reading Practice

Vocabulary notes

aptly	— соответствующим образом, быстро, легко
capital movements	— движение капитала
claim	— требование, претензия
conclude (v)	— заключать
conversion	— конверсия
convertibility	— конвертируемость
current transactions	— текущие сделки
foreign exchange dealer	— дилер, торгующий иностранной валю­той
dealings	— коммерческие сделки
domicile (v)	— обозначать место платежа по векселю
Eurodollar market	— международный евродолларовый рынок
excess funds	— избыточный капитал
arbitrage transaction	— арбитражная сделка
money movements	— движение денег
non-resident	— нерезидент
partial convertibility	— частичная конвертируемость
place	— размещать, выпускать на рынок
two-tier market	— двухъярусный валютный рынок
floating currency	— плавающая валюта
to deliver (transfer) an amount of currency to a bank account	— поставить (перевести) валюту на счет в банке
to quote (exchange) rates	— котировать, устанавливать курс валюты
to settle a debt	— погашать, урегулировать долг (обязательства)
to settle a claim	— урегулировать требование